Vireo Health Generates Q4 Revenue of $5.6 Million

Vireo Health Announces Full Year 2018 Revenues of $18.5 Million with 70% Year-Over-Year Growth

Company raised $51.4 million through reverse takeover transaction (RTO) in March

Successful closing of five acquisitions year-to-date establishes 10-state, nationwide footprint

Green Goods™ dispensary locations to begin opening during the second quarter

MINNEAPOLIS, April 30, 2019 /PRNewswire/ — Vireo Health International, Inc. (“Vireo” or the “Company”) (CSE: VREO), a leading science-focused, multi-state cannabis company, today reported financial results for its fourth quarter and full year ended December 31, 2018. All currency figures referenced in this release reflect U.S. dollar amounts.

2018 was a momentous year for Vireo Health, with strong operating performance and substantial progress toward becoming a truly differentiated multi-state operator. We achieved significant revenue growth in our existing markets and also laid the groundwork to double our footprint to ten or more states while simultaneously investing in industry-leading research and innovation.

Kyle Kingsley, M.D., Founder & CEO

Overall, we believe that the Company is better positioned for future growth, profitability, and value creation for shareholders, and we’re looking forward to another successful year in fiscal 2019.

Business Highlights

  • Vireo generated revenue in three states in 2018: Minnesota, New York, and Pennsylvania. Total revenue for Q4 2018 increased 72 percent year-over-year to $5.6 million versus Q4 2017. Total revenue for FY 2018 increased approximately 70 percent year-over-year to $18.5 million versus FY 2017.
  • During FY 2018, Company subsidiaries and affiliates were awarded a processing license in the state of Ohio, a grower and processor license in the state of Maryland, and a license in Pennsylvania to open three dispensaries. The Company also signed an agreement to acquire a Puerto Rico company which has received pre-qualifications to obtain required licenses to operate a medical cannabis cultivation facility, a processing facility, and six dispensaries.
  • During the first four months of 2019, the Company acquired various cannabis licenses and real estate in the states of Arizona, Massachusetts, Nevada, New Mexico, and Rhode Island. These acquisition activities expanded Vireo’s licensed footprint to 10 states nationwide.
  • Net loss for Q4 and FY 2018 were $1.2 million and $3.1 million, respectively. Adjusted net income for Q4 and FY 2018 were $1.3 million and $1.5 million, respectively.
  • Q4 2018 EBITDA and Adjusted EBITDA, as described in accompanying disclosures and footnotes, were $1.8 million and $4.3 million, respectively. For FY 2018, EBITDA and Adjusted EBITDA were $4.8 million and $9.4 million, respectively.
  • During the year, the Company onboarded 75 new team members, including several key executive hires, bringing total headcount to 224 nationwide as of December 31, 2018. As of the date of this news release, the Company has over 330 team members nationwide.

Fourth Quarter and Fiscal Year 2018 Financial Summary

Total revenue for Q4 2018 was $5.6 million, up 72 percent from $3.3 million in Q4 2017. For FY 2018, total revenue was $18.5 million, up 70 percent from $10.9 million in FY 2017. Fourth-quarter and full-year revenue growth were driven by increased patient counts and demand in the states of Minnesota and New York, as well as the beginning of revenue generation in the state of Pennsylvania.

Gross profit before fair value adjustments for Q4 and FY 2018 was $1.8 million or 31.2 percent of revenue, and $8.9 million or 48.4 percent, respectively, as compared to $922,156 or 28.2 percent, and $5.8 million or 53.0 percent for the same periods last year. Gross profit after fair value adjustments and net gains on growth of biological asset for Q4 and FY 2018 was $5.4 million or 95 percent, and $16.8 million or 90.9 percent, respectively, as compared to 36.1 percent and 58.6 percent for the same periods last year.

Total operating expenses for Q4 and FY 2018 were $3.6 million and $12.2 million, respectively, as compared to $700,224 and $6.4 million for the same periods last year. Total operating expenses include selling, general and administrative (“SG&A”) expenses, which totaled $1.6 million and $3.8 million for Q4 2018 and FY 2018, respectively. The increase in SG&A expenses was primarily driven by investments in talent to support the Company’s growing businesses.

Other expense was $1.2 million in Q4 2018 and $2.5 million for FY 2018. These non-operating expenses primarily reflect interest expenses associated with recent sale-and-leaseback transactions of certain cultivation facilities.

Net loss attributable to Vireo in Q4 2018 was $1.2 million, as compared to net income of approximately $273,098 in Q4 2017. For the FY 2018, net loss was $3.1 million, compared to a net loss of approximately $430,689 in FY 2017.

EBITDA was $1.8 million in Q4 2018, as compared to $603,020 in Q4 2017. Excluding transaction costs, share-based compensation expenses, and new market start-up costs, Vireo generated Adjusted EBITDA of $4.3 million in Q4 2018. For FY 2018, EBITDA was $4.8 million, as compared to $163,352 in 2017. Excluding transaction costs, share-based compensation expenses, and new market start-up costs, Adjusted EBITDA was $9.4 million for the year, as compared to $693,890 in 2017. Please refer to the Supplemental Information and Reconciliation of Non-IFRS Financial Measures at the end of this press release for additional information.

Subsequent Events

On March 20, 2019, Vireo commenced trading on the Canadian Securities Exchange under ticker symbol “VREO” following the successful completion of the Company’s reverse takeover (“RTO”) of Darien Business Development Corp. In conjunction with the RTO, Vireo raised approximately $51.4 million in proceeds through a brokered and non-brokered private placement. The Company intends to utilize the net proceeds from the transaction to help finance M&A activity, as well as for general corporate purposes including business development, capacity expansion projects, working capital requirements and other strategic initiatives.

Balance Sheet and Liquidity

As of December 31, 2018, total assets were $69.3 million, including cash on hand of $9.6 million. Total long-term liabilities were $23.4 million as of December 31, 2018, with $1.0 million of debt currently due within 12 months.

Total equity shares outstanding as of December 31, 2018, were 2,206,269. As of the date of this release, total fully-diluted equity shares outstanding, on an as converted basis, were 111,882,624. The increased share count as compared to December 31, 2018 is primarily attributable to share-split activity as well as the sale of subscription receipts in conjunction with the Company’s RTO during the first quarter of 2019.

2019 Outlook

During fiscal year 2019, Vireo expects to conduct the following development activities:

  • Launch Green Goods™ dispensaries in Pennsylvania and expand existing retail footprint in New Mexico
  • Increase cultivation and processing capacity in Arizona, Minnesota, New Mexico and New York
  • Begin build-out of new facilities in Massachusetts, Nevada, Puerto Rico, and Rhode Island
  • Roll out new cannabis brands and innovative products in multiple state-based markets
  • Wholesale Vireo-branded products to third-party dispensaries in Ohio
  • Plant industrial hemp crops for IP development in Minnesota and New York

Dr. Kingsley commented, “Our management team is focused on executing several key strategic initiatives in fiscal year 2019, including the rollout of new dispensary locations, the pursuit of additional organic and acquisitive growth opportunities, and the development of intellectual property that we can monetize for the long-term benefit of patients, consumers, and shareholders. In the coming months, our subsidiaries in Minnesota and New York will also begin planting hemp crops that will support our IP development initiatives. We’re looking forward to sharing updates on those projects, in addition to our ongoing scientific research studies and other growth initiatives, as material updates become available.”

Conference Call and Webcast Information

Vireo Health management will host a conference call with research analysts on Tuesday, April 30, 2019 at 8:30 a.m. ET to discuss its financial results for Q4 and FY ended December 31, 2018. The conference call may be accessed by dialing 866-211-3165 (Toll-Free) or 647-689-6580 (International) and entering conference ID 4176936. A live audio webcast of this event will also be available in the Events & Presentations section of the Company’s Investor Relations website at and will be archived for one year.

Additional Information

Additional information relating to the Company’s fourth quarter and fiscal year 2018 results, including performance of Vireo’s predecessor company, Darien Business Development Corp., is available on SEDAR at

Vireo Health refers to certain non-IFRS financial measures such as adjusted net income, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and adjusted EBITDA (defined as earnings before interest, taxes, depreciation, amortization, less certain non-cash equity compensation expense, one-time transaction fees, and other non-cash items. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. Please see the Supplemental Information and Reconciliation of Non-IFRS Financial Measures at the end of this news release for more detailed information regarding non-IFRS financial measures.

About Vireo Health International, Inc.

Vireo’s mission is to build the cannabis company of the future by bringing the best of medicine, engineering and science to the cannabis industry. The Company’s physician-led team of more than 300 employees provides best-in-class cannabis products and customer experience. Vireo cultivates cannabis in environmentally-friendly greenhouses, manufactures pharmaceutical-grade cannabis extracts, and sells its products at both company-owned and third-party dispensaries. The Company is currently licensed in ten states including Arizona, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Ohio, Pennsylvania, and Rhode Island.  For more information about the company, please visit

Supplemental Information

The financial information reported in this news release is based on management prepared financial statements for the fiscal year ended December 31, 2018. Accordingly, such financial information may be subject to change. Fully-audited financial statements for the period will be released and filed under the Company’s profile on SEDAR by April 30, 2019. All financial information contained in this news release is qualified in its entirety with reference to such audited financial statements. While the Company does not expect there to be any material changes, to the extent that the financial information contained in this news release is inconsistent with the information contained in the Company’s audited financial statements, the financial information contained in this news release shall be deemed to be modified or superseded by the Company’s audited financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws.

Reconciliation of Non-IFRS Financial Measures

This news release contains references to financial metrics such as EBITDA, Adjusted EBITDA, and Adjusted Net Income, which are non-IFRS measures and do not have standardized definitions under IFRS. The Company has provided these non-IFRS financial measures in this news release as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non-IFRS financial measures are presented because management has evaluated the Company’s financial results both including and excluding the adjusted items and believe that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the Company’s business. The Company has provided reconciliations of these supplemental non-IFRS financial measures to the most directly comparable financial measures calculated and presented in accordance with International Financial Reporting Standards. Supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the IFRS financial measures presented in this news release.

“New market startup costs include expenses such license application fees, legal and other professional fees, and other administrative start-up expenses

Original press release

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